A U.S. federal judge, Loren AliKhan, has temporarily halted President Donald Trump’s executive order to freeze hundreds of billions of dollars in federal grants and loans. The ruling, issued just minutes before the directive was set to take effect on Tuesday, January 29, 2025, is a major setback for the Trump administration’s aggressive fiscal policy.
At a hearing in Washington, D.C., AliKhan ordered the Trump administration to continue disbursing already approved federal funds, at least until February 3, when a follow-up hearing will determine the next legal steps. However, the judge clarified that the ruling does not prevent the administration from halting funds for new programs or reinstating grants that have already ended.
The order comes in response to a lawsuit filed by the American Public Health Association, the National Council of Nonprofits, and the Main Street Alliance, all of which challenged the legality of Trump’s directive. The controversial freeze, set to take effect at 5 p.m. EST on Tuesday, was issued by the acting head of the Office of Management and Budget (OMB) on Monday, drawing criticism from advocacy groups and state officials.
Meanwhile, White House Press Secretary Karoline Leavitt defended the order, stating that Trump’s move to pause billions in federal funding was a measure to ensure responsible spending. “This is about being good stewards of tax dollars and making sure that every dollar is spent wisely,” Leavitt said in a statement.
Trump’s sweeping freeze on grants and loans was expected to impact various sectors, including healthcare, small business support, and nonprofit organizations that rely on federal funding. Critics argue that the move was politically motivated and could disrupt essential programs.
As legal battles unfold, all eyes are on the upcoming February 3 hearing, where the court will decide whether to extend or modify the injunction. The decision will have significant implications for federal funding policies and could shape the trajectory of Trump’s economic strategy in his new term.
